Is the agency problem unique to for-profit organizations or does it occur in not-for-profits as
well?
Solution
Yes Agency problem is unique or rare for profit organisation hardly u can find agency problem
but these problems occures in non for profits oraganisaton frequently .
Agency problems in NFPs arising from excess holdings of endowment assets.Research explores
agency costs of excess cash holdings in for-profit firms, and, although the evidence is somewhat
mixed, researchers generally find that excess cash is associated with excessive acquisitions and
investment. Compared to cash holdings in for-profit firms. Excessive acquisitions and
investment. Compared to cash holdings in for-profit firms, NFPs hold substantially greater assets
in their endowments. Further, NFPs do not have obvious residual claimants with a strong interest
and ability to monitor management, and unlike for-profits, it is generally not feasible for NFPs to
return excess assets to donors...
Is the agency problem unique to for-profit organizations or does it .pdf
1. Is the agency problem unique to for-profit organizations or does it occur in not-for-profits as
well?
Solution
Yes Agency problem is unique or rare for profit organisation hardly u can find agency problem
but these problems occures in non for profits oraganisaton frequently .
Agency problems in NFPs arising from excess holdings of endowment assets.Research explores
agency costs of excess cash holdings in for-profit firms, and, although the evidence is somewhat
mixed, researchers generally find that excess cash is associated with excessive acquisitions and
investment. Compared to cash holdings in for-profit firms. Excessive acquisitions and
investment. Compared to cash holdings in for-profit firms, NFPs hold substantially greater assets
in their endowments. Further, NFPs do not have obvious residual claimants with a strong interest
and ability to monitor management, and unlike for-profits, it is generally not feasible for NFPs to
return excess assets to donors..
